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Who Has the Power? “Perhaps nowhere else in banking do consumers have as much influence as they do on the retail payments sector”
Bank Systems & Technology
Paym ent Platform s and Consum er Choice: Paym ent Platform s and - - PowerPoint PPT Presentation
Paym ent Platform s and Consum er Choice: Paym ent Platform s and - - PowerPoint PPT Presentation
Paym ent Platform s and Consum er Choice: Paym ent Platform s and Consum er Choice: Com peting for Consum ers Mind Com peting for Consum ers Mind Chicago Federal Reserve Payments Conference May 10, 2007 W illiam McCracken CEO SYNERGI
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The Future?
All cards on one chip- card number and type, expiration date, and
some means of authenticating Cardless world- Biometrics tied to your payment accts Smart Cards- Card issuers now have smart credit cards that are "pre-approved" for a certain number of transactions and a certain amount of credit Electronic Purses- Smart card that actually stores money rather than account information
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Annual Number of Noncash Payments in 2000 and 2003
15.4% 0.8 0.5 EBT 21.0% 5.3 3.0 Online Debit 24.9% 10.3 5.3 Offline Debit 13.4% 9.1 6.2 ACH 6.7% 19.0 15.6 Credit Card
- 4.3%
36.7 41.9 Check 3.8% 81.2 72.5 Noncash Payments CAGR* 2003 Estimate (billion) 2000 Estimate (billion) *CAGR is the compound annual growth rate. 2004 Federal Reserve Payments Study
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Debit Card Usage by Age
67 75 68 59 10 20 30 40 50 60 70 80 Total 18 to 34 35 to 49 50+ (Base = 1,013 total respondents)
%
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Online Bill Payment by Age
68 68 62 78 20 40 60 80 100 Total 18 to 34 35 to 49 50+
(Base = 1,013 total respondents)
%
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Largest Purchase Amount to Use Cash
DK 5% < $5 10% $25-$49.99 15% $15-$24.99 11% $5-$14.99 12% $50+ 47%
2006 Avg: $19.43
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Payment Methods for POS Purchase Under $5
6 17 24 81 20 40 60 80 100 (Base = 1,013 total respondents) Gift/Prepaid Cards Credit Cards Debit Cards Cash
%
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Preferred Pymt. Method for Purchases Under $5
5 8 6 2 8 10 18 11 21 10 34 2 52 10 20 30 40 50 60 Contactless Card Prepaid/Gift Card Biometric Debit Card Credit Card PayPal/Other Svc Cash
%
POS Online
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Usage of Cell Phone, PDA, or MP3 for Financial Activities
No 89% Used Cell Phone, PDA
- r MP3
11%
(Base = 1,013 total respondents)
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Likely to Use Cell Phone, PDA or MP3 for Financial Activities
No 81% Likely 19%
(Base = 1,013 total respondents)
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Advantages of Using Wireless Devices for Financial Activities
34 42 44 45 48 52 54 56 10 20 30 40 50 60 Info Up-to-Date Pay Bills on Due Day Save Time Save Postage Emergency Almost Anywhere Done Out of Town/ Vacation 24/7 % (Base = 1,013 total respondents)
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Mobile to Replace Cash & Plastic?
NTT DoCoMo 2006 study
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All consum ers are not alike…..
Comic: Zits
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Predicting the Future is Risky
“I think there is a world market for perhaps 5 computers” Thomas Watson, CHM of IBM, 1943 “There is no need for an individual to have a computer in his home” Ken Olsen, President of DEC, 1977 “No one will need more than 637kb of memory for a personal computer. 640k ought to be enough for anybody” Bill Gates, founder of Microsoft, 1981 “Heavier than air flying machines are impossible” Lord Kelvin, British mathematician & physicist, 1895 “Radio has no future” Lord Kelvin, British mathematician & physicist, 1895
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